Coronavirus Stimulus: Government Sending $600-$1,200 Checks To Most People + Additional Benefits

The United States government just approved a $2 trillion dollar stimulus package, the largest in U.S. history, to respond to the coronavirus crisis. Here’s what you need to know.

Stimulus Overview

The stimulus bill, nearly 900 pages long in which you can read here, has now passed both the Senate and the House and was just signed off by President Trump.

Below is a partial breakdown of where the $2 trillion will go:

  • $250B for direct payments/checks to individuals and families (see below)
  • $250B to boost unemployment insurance benefits (see below)
  • $367B for small business loans (see below)
  • $500B in loans for distressed companies – $50B of this is earmarked for airlines (see below)
  • $130B in funding for hospitals and medical equipment
  • $150B in funding for state and local governments

It is by far the most expensive and far-reaching measures Congress has ever passed.

It’s hard to overstate the massive negative effects the on-going virus pandemic is causing. The economy is definitely in a deep recession. Although GDP numbers aren’t out yet, you don’t need that to know how bad it is.

U.S. unemployment claims surged to almost 3.3 million last week. To put that into perspective, the previous week was just 282,000. During the Great Recession of 2008-2009, the highest weekly claim was 665,000.

The stimulus bill is intended to provide a buffer for those who need it most while we wait for the peak and eventual decline of the coronavirus crisis. Here are the highlights of the bill:


Direct Payments to Individuals

The part most people are interested in are the checks that the government is sending to the majority of people.

  • Individuals would get $1,200 and married couples would get $2,400
  • Parents would get an additional $500 per child under 17
  • Payments will be phased out for individuals making over $75,000 and no payments will be given for individuals making over $99,000.
  • Payments will be phased out for married couples making over $150,000 and no payments will be given for individuals making over $198,000
  • People on Social Security are also eligible for these payments
  • Those who didn’t earn anything are also eligible, although I’m not sure how they’re going to find how to pay you

The government will determine your income by your 2019 tax return, or your 2018 tax return if you haven’t file your taxes this year yet. They’ll look for your adjusted gross income (AGI), not how much total money you’ve made.

Ninja Update: The check are being sent out. Click here to check how much money you’ll get and where it’s being sent to.

Ninja Note: There seems to be a bit of confusion on this point – here’s what you should do:

–> If you made less than $75k (or $150k as a couple) in 2018, but are making more than that in 2019, do not file your 2019 taxes yet in order to get the payment.

–> If you made more than $75k (or $150k as a couple) in 2019, but made less than that in 2019, then file immediately so you become eligible for this payment.

–> If you made less than that for both years, then it doesn’t matter if you file this year now or later because you’re going to get the payment regardless.

–> Finally, if you made more than $75k (or $150k as a couple) in both 2018 and 2019, but you’re expected to make less than that in 2020, you won’t get the payment now. However, when you file for your 2020 taxes, the payment will be added to your tax refund.

The stimulus payment will be sent to wherever your last tax refund went. If you got paid by a check, you’ll get a check. If you had a direct deposit (since January 2018), it will be sent to that same bank. Those with direct deposits could see the payment in a few weeks while those with checks might have to wait a while longer.

It’s important to mention that this not only applies to U.S. citizens, but also for those who are green card holders and permanent residents.

Best of all, these are considered tax credits, so the money they’re giving you is NOT taxable.

Expansion of Unemployment Benefits

Another big part is the expansion of unemployment benefits:

  • Federal government would give jobless workers an additional $600 a week for up to 4 months
  • This is on top of current state benefits of between $200 to $550 (depending on the state you work in)
  • Extends unemployment benefits by an additional 13 weeks (good through December 31, 2020)
  • Since most states offer 26 weeks, it will now be 39 weeks
  • Removes the 1-week waiting period when someone loses their job so they can receive benefits immediately
  • Provides unemployment benefits for the first time to self-employed workers and “gig-economy” workers (Uber, AirBnB, etc.)
  • Includes unemployment benefits to furloughed workers (so companies don’t have to layoff employees in order for them to receive benefits)

This is pretty extensive. Usually, unemployment gives you 50% of what your weekly salary was. This additional $600 payment would give a lot of unemployed people their full salary.

Business Benefits

  • Small Business Loans: Creates a fund pool that businesses with less than 500 employees can borrow up to $10 million from – businesses who promise to keep their employees can eventually forgive part of the loan (8 weeks worth of payroll, mortgage interest, rent costs, and utilities)
  • Payroll Tax Deferment: Businesses can defer 2020 payroll taxes with half being paid by December 2021 and the other half paid by December 2022
  • Payroll Tax Reimbursement: Businesses affected by coronavirus will get 50% of their payroll taxes paid back, up to $10,000

Student Loan Payments Suspended

The Department of Education will suspend payments on student loans without interest or penalty through September 30.

This is for federal student loans only, not private ones.

Bailouts for Airlines

Airlines and airports get what they wanted. The stimulus package includes $32 billion in grants for wages and benefits, broken down as follows:

  • $25 billion for airlines
  • $4 billion for cargo airlines
  • $3 billion for industry contractors (baggaging, ticketing, catering, and aircraft cleaning companies)

Additionally, another $29 billion for passenger airlines and cargo airlines will be available in the form of loans.

Companies that want the bailout are restricted from cutting employee pay, making furloughs, or buying back stock until the end of September 2020. Executive compensation increases are also limited.

Airlines will also not be allowed to cut service on “low-profit” routes and keep operating to service the needs of all people for a certain period of time.

Miscellaneous Stimulus Items

Other interesting tidbits of the stimulus package:

  • Offers certain coronavirus-related costs can be withdrawn from a retirement fund without the normal 10% early withdrawal penalty (up to $100,000)
  • Allows people to deduct $300 in charitable contributions (even for those who do not itemize) – nice for those who want to help and get an additional deduction in return
  • Protects against foreclosures and evictions through extensions of payment deadlines with no fees or interest charges for delayed or late payments

The Bottom Line

As more details come out, we’ll be sure to revise our post with additional nuggets people may find value in. Obviously, it’s a huge (Trump voice: “yuge”) package meant to stem the crazy chaos that’s been happening lately.

About John Pham

John Pham is a personal finance expert, serial entrepreneur, and founder of The Money Ninja. He has also been fortunate enough to have appeared in the New York Times, Boston Globe, and U.S. News & World Report. John has a B.S. in Entrepreneurship and a Masters in Business Administration, both from the University of New Hampshire.

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4 years ago

Excellent job. The relief check section is more accurate than Forbes or CNN, which erroneously states who gets them.

4 years ago

What if you made more than $75k in 2018 and 2019, but you’re going to make less this year?